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HMRC internal manual

Construction Industry Scheme Reform Manual

The Scheme: contractors: multiple sites / schemes

Some contractors administer operations from several different bases. A single contractor scheme can be difficult for these contractors to operate. It can be difficult for the business’s head office to organise the verification process and monthly returns across the various bases.

SI2005/2045 reg 3, allows a contractor to elect to operate separate contractor schemes for each distinct part of the business. The election must be made to HMRC in writing and must include

  • the information necessary to identify each group of subcontractors the contractor wishes to deal with under a separate contractor scheme. For instance, the contractor might define such a group in terms of ‘All subcontractors paid by my Bristol regional office’ and likewise for each of the remaining units.
  • a declaration that the contractor makes payments subject to CIS only to the subcontractor groups identified in the election. This is so that the groups specified cover the contractor’s whole subcontractor workforce and none are left out of account.

In most cases, an election of this kind comes into force for the tax year following that in which it is made.

However, there is a separate provision under Regulation 3 where a contractor acquires all or part of another construction business for which a contractor scheme already exists. In this case the contractor may make an election to have existing contractor schemes and any relating to the newly acquired business treated as separate schemes for the tax year in which the acquisition is made. These elections must be made within 90 days of the acquisition.

Regulation 3 elections are dealt with by the centralised employers group (NICEO). Guidance about setting up an additional scheme is set out in CISR30000 onwards.

Revoking Regulation 3 elections

Once made, an election remains in force until the contractor revokes it. This can be done by sending a notice to the Inspector. A revocation made in this way applies to the tax year following that in which it is made.

However, a revocation does not prevent the contractor from making a fresh election for that following year or subsequent years if circumstances require it.